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Raytheon Technologies (RTX) Beats on Q2 Earnings, Ups EPS View

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Raytheon Technologies Corporation’s RTX second-quarter 2021 adjusted earnings per share (EPS) of $1.23 outpaced the Zacks Consensus Estimate of 92 cents by 33.7%. However, the bottom-line figure improved 164% from the year-ago quarter’s adjusted earnings of 39 cents.

Including one-time items, the company reported GAAP earnings of 69 cents against loss of $2.56 per share in the year-ago quarter.

The year-over-year improvement in the bottom line is attributable to higher year-over-year revenues generated in the reported quarter.

Operational Performance

Raytheon Technologies’ second-quarter sales of $15,880 million beat the Zacks Consensus Estimate of $15,824 million by 0.4%. The sales figure also increased 12.9% from $14,061 million recorded in the year-ago quarter.

Total costs and expenses slipped 0.3% year over year to $14,680 million. The company generated operating profit of $1,282 million against operating loss of $3,760 million in the year-ago quarter.

Raytheon Technologies Corporation Price, Consensus and EPS Surprise

Raytheon Technologies Corporation Price, Consensus and EPS Surprise
Raytheon Technologies Corporation Price, Consensus and EPS Surprise

Raytheon Technologies Corporation price-consensus-eps-surprise-chart | Raytheon Technologies Corporation Quote

Segmental Performance

Collins Aerospace: Adjusted sales at this segment improved 6% year over year to $4,545 million in second-quarter 2021 due to higher commercial OEM sales as well as commercial aftermarket sales.

Its adjusted operating income came in at $518 million compared with the year-ago quarter’s level of $24 million.

Pratt & Whitney: Adjusted sales at this segment rose 19% year over year to $4,280 million driven by sales growth in commercial aftermarket and commercial OEM.

Its adjusted operating profit was $96 million against the year-ago quarter’s operating loss of $151 million.

Raytheon Intelligence & Space: This segment recorded second-quarter sales of $3,805 million, up 12% year over year. Its operating profit was $415 million, up 34%.

Raytheon Missiles & Defense: This unit recorded sales of $3,985 million, up 15% year over year. The unit recorded $532 million of adjusted operating profit in the quarter, up 38%.

Financial Update

Raytheon Technologies had cash and cash equivalents of $8,051 million as of Jun 30, 2021, compared with $8,802 million as of Dec 31, 2020.

Long-term debt was $29,916 million, as of Jun 30, 2021, down from $31,026 million as of Dec 31, 2020.

Net cash inflow from operating activities amounted to $1,326 million at the end of second-quarter 2021 compared with $210 million at the end of second-quarter 2020.

Its free cash flow was $1,302 million compared with $559 million at the end of second-quarter 2020.

Guidance

Raytheon Technologies raised the lower end of its revenue view for 2021 and the entire earnings guidance range.

The company currently projects EPS in the range of $3.85-$4.00, compared with the earlier guidance of $3.50-$3.70. The Zacks Consensus Estimate for EPS, pegged at $3.74, lies below the newly guided range.

The company currently expects to record revenues in the band of $64.4-$65.4 billion, compared with the prior guidance of $63.9-$65.4 billion. The Zacks Consensus Estimate for revenues, pegged at $65.23 billion, is lower than the company’s new guided range.

The company currently expects to generate free cash flow in the range of $4.5-$5 billion in 2021, higher than the earlier guidance of $4.5 billion.

Zacks Rank

Raytheon Technologies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Recent Defense Release

Lockheed Martin LMT reported second-quarter 2021 adjusted earnings of $7.13 per share, which surpassed the Zacks Consensus Estimate of $6.51 by 9.5%.

Hexcel Corporation HXL reported second-quarter 2021 adjusted earnings of 8 cents per share, which exceeded the Zacks Consensus Estimate of a penny.

An Upcoming Defense Release

General Dynamics GD is scheduled to report second-quarter 2021 results on Jul 28.


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